Arch Therapeutics Inc (OTCBB:ARTH) Corrects Despite PR
Yesterday the stock of Arch Therapeutics Inc (OTCBB:ARTH) suffered a sizable correction. The ticker opened at $0.245 but began sliding downwards almost immediately and by the time of the closing bell had arrived to $0.221 for a loss of nearly 8%. The drop took place on 785 thousand traded shares which doubled the 30-day average of 348 thousand shares.
ARTH did issue a new PR in the morning but it failed to help the stock maintain its share price. The company announced a collaboration agreement with CÚRAM Centre for Research in Medical Devices located in Galway, Ireland. Under the terms of the agreement CÚRAM will match the funds used by ARTH at a 2:1 ratio for a maximum of $500 thousand annually. The news was certainly positive but investors might have felt that the announced funds are rather underwhelming, especially when you take into consideration the fact that according to the latest financial report ARTH expects to need between $12 million and $17 million in order to pursue regulatory approval in Europe and the U.S.
Not to mention that the report contained some rather lackluster numbers – ARTH finished the first quarter of the year with:
• $573 thousand cash
• $606 thousand total current assets
• $1.39 million total current liabilities
• ZERO revenues
• $833 thousand net loss
Investors probably were also disappointed to learn that the clinical trial initially planned to start during the first half of 2015 is now expected to be initiated in the third quarter of the year.
When the trial gets launched investors might feel reinvigorated and ARTH’s shares might move higher up the chart. A new PR talking about the LD MICRO Invitational conference that took place yesterday could also boost the stock. During the conference the CEO of the company should have provided a corporate update, discussed planned upcoming milestones, and highlighted some of the differentiating features of ARTH’s AC5 Surgical Hemostatic Device.
